Role of Augmented Reality in Driving Loyalty Programs

Augmented reality technology

Augmented reality (AR) is the science and art of using digital technologies to overlay virtual content (e.g., text, graphics, or 360-degree visuals) into a person’s view of the physical world. The real-time and interactive blend of virtual and physical information results in a compelling customer experience. AR by itself has the potential to boost customer’s engagement in online and mobile shopping. Retail industry has seen many implementations of AR-driven experience in customer’s shopping journey like IKEA allows their customers to place and move furniture around their homes without even having to assemble it first and Sephora and Ray Ban enables customers to virtually try cosmetics and sunglasses.

AR in Loyalty

Every business is on a digital rise and because every customer is now a digitally connected. Increasingly shoppers have used social media, games, and mobility to transform their purchasing experiences. In response to the rise of the digital customer, retailers are looking to leverage digital technologies to drive new levels of customer engagement and competitive advantage. One area that holds particular promise is augmented reality.

Nowadays customers look for interesting rewards and discount offers from their loyalty programs and top of that they enjoy the fun of playing games. If one can provide this both options to play games and earn the reward, this could be the next driving force to increase loyalty and spending.

Moreover, augmented reality promotions could be an effective part of loyalty as they allow consumers to interact with a product in a unique and personal way.

A win-win strategy

Augmented reality (AR) technology creates an experience like popular Pokémon Go game. AR coupled with real-life prizes and bonuses can provide a win-win strategy for retailers and hospitality companies as well as for the customers. Registered customers will be engaged in the interactive augmented reality game, where they can collect bonuses or discounts by completing a few simple tasks. AR integrated loyalty app can also attract the user’s attention, provide discounts, promote new locations, and simply advertise products and most of all, to increase sales and grow business.

Eventually, time will tell how augmented reality can impact loyalty, but many leading brands have already harnessed its potential. The following are three recent examples of augmented reality’s application specific to loyalty programs:

  • Walgreens: Walgreens launched an augmented reality program using Google’s indoor mapping technology, Project Tango. Using the Walgreens mobile app, customers receive help navigating the store layout with relevant promotions popping out along the way, including offers tied to rewards points.
  • Century 21: The New York-based retailer launched a pilot program last year that leverages mobile technology and augmented reality to increase memberships. Customers use their smartphones to scan shopping bags and spin a virtual wheel full of offers. The push toward a more immersive in-store experience is part of Century 21’s goal to increase loyalty program sign-ups by up to 34% last year.
  • Kraft: Last summer, Kraft launched an augmented reality campaign to encourage Walmart shoppers to use their mobile devices to scan campaign signage and logos that link to digital assets connected to a larger campaign and sweepstakes. One example is “Paisley Points,” which offered shoppers points redeemable for autographed Brad Paisley merchandise when they upload images of Walmart receipts with proof of a Kraft purchase.

What’s Next for Augmented Reality and Loyalty

Wearable technology has sparked renewed buzz around augmented reality. This may open up a completely new category for augmented reality compared to what we’re used to with respect to simple smartphone interaction. Wearable technology can tie consumers into the real-time data stream where they can reveal more about their preferences and behaviours. From there, marketers can gain more insight into what to market to them, how to communicate with them about the things that get them excited,  and filter out unwanted or irrelevant content – all of which could lead to greater personalization and contextual relevance.

Augmented reality stands to become an increasing component to the loyalty marketing mix as brands aim to create more memorable, personalized experiences. Expect to see augmented reality tied into more loyalty strategies if marketers can prove how it can engage consumers, draw them into physical locations, encourage frequency, and build brand advocacy.

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